Profit drop warning by Hengdeli
Hong Kong-listed luxury watch retailer Hengdeli Holdings has warned its shareholders to expect a 70 per cent drop in profit share.
Hengdeli, whose shareholders include the LVMH Group, Swatch and the Zhang family, has more than 500 retail stores in Mainland China, Taiwan and Hong Kong, selling more than 50 brands and 400 wholesale customers in more than 100 major cities.
Its retail network comprises Elegant, Prime Time/Hengdeli and single-brand boutiques.
The profit warning follows a preliminary review by the group’s management leading up to the finalising of its trading results for the year ended December 31, expected to be published next month.
Hengdeli says there are three main factors responsible for the decrease – a one-off gain from the disposal of investment properties in Shenzhen and Taiwan by the group in 2014, a drop in revenue and gross profit mainly because of the economy, and the impairment of the goodwill and interest in O Luxe Holdings (formerly the Ming Fung Jewellery Group).